Today, I go Activist. TUESDAY Traffic Tips

No, not with pink kitty caps, but just as important to our industry. 1031 tax deferred exchanges are VITAL to the commercial real estate business. Today, I solicit your help in writing your D.C.
elected officials to let them  know your stance on this most critical topic. IPX 1031 exchange has made it easy for you. Just click on the link and you will be led to a portal to write your representatives. This and much more on this week's VIDEO tip.

www.ipx1031.com

This a GOOD Offer - But is it the BEST Offer?

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This is seemingly an easy question to answer, right? You should instantly be able to discern an offer's benefits and whether the offer is a good one.

In practice, the determination of the BEST offer is maybe not as simple as one would believe.

Today, I want to explore the characteristics of a good offer for your commercial real estate and what makes it the BEST offer.

Most sellers of commercial real estate gravitate to the price offered vs. the asking price. If the offer is at asking price, cool! Game on. If the offer fails to reach the asking price expectation, it is summarily discarded. Finally, if the offer eclipses the asking price - silence ensues as a quick determination is made - did you ask too little?

However, the offer with the highest price may not in fact be the best offer. Recently, we received an offer for a project we lease and manage. The buyer planned to tear down the existing buildings and construct multi family. The buyer was prepared to pay a huge number for the real estate - and well above market. The problem was he wouldn't close for eighteen months - no deal!

Terms. Terms vary in a commercial real estate deal. Most contain a contingency period which can consume as few as two weeks to as many as 90 days. Buyers use the contingency time to study the physical aspects, complete a title search, obtain financing and vet the occupants, if any. Two offers at the same price but one with a shorter contingency period is generally preferable.

Number of competing offers. If you have the luxury of multiple competing offers, you should create a grid outlining all of the points contained in this post. Rank the offers based upon all of these factors. The best offer will come shining through.

Nature of the buyer. Will the buyer occupy the real estate or rely upon rents from an occupant as his purchase's justification? Typically, an owner occupant will pay more and focus upon the utility of the real estate for his use.

Source of funds. Has the buyer a cache of cash waiting to be deployed to buy your building? Or, will the buyer rely upon other people's money (OPM) to complete the buy? How about financing? A deal that includes a bank's OK is by nature more time consuming and risky. All of the buyer's AND banker's boxes must be checked in order for the sale to progress.

Buyer's motivation. Why does the buyer want to buy your building? You may be thinking, who cares? He just does. Contained within the answer to this question, however, may be a clue as to whether the sale will close at the agreed upon price and terms.

Contingencies. Mentioned above under the terms paragraph, certain items must be satisfied in order for a sale to occur - title, financing, physical inspection. Caution should be given to conditions outside the normal realm such as conditional use permits, construction of improvements, zone changes, or the sale or lease of another property. If a buyer's purchase is contingent upon any of these conditions, you must carefully weigh the likelihood of waiver - otherwise, what appears to be a great offer might in fact become a failed effort.

As advertised, many factors should be considered to convert a good offer into the BEST offer.

#cre Brokers SUCK at This. TUESDAY Traffic Tips

Today I discuss a topic ALL of us can stand to improve because typically we ALL suck at it! This and much more on this week's VIDEO tip for commercial real estate.

STOP Saying This! TUESDAY Traffic Tips

STOP Saying This. TUESDAY Traffic Tips. Are you asking your client for permission to fail? If you are saying this, chances are, yes. I discuss this and MUCH more in this week's VIDEO tip.

Six Commercial Real Estate Lessons Learned in 2016

I’m sure many of you reading this post have broken all of your 2017 New Year’s resolutions. That's what a week back to the grind will do for you. What appears to be a good lifestyle change in the fog of December 31st quickly becomes fodder for the refuse once the reality of life kicks in. So, I won't bore you with my resolutions but instead provide you with some commercial real estate lessons I learned last year. 

Lesson one. Commercial real estate is woefully behind our residential counterparts when it comes to technology. Our industry is dominated by old, grey haired men. We haven't embraced technology. Quite the contrary, we shun it. Have you ever attempted to conduct an on line search for a commercial property? Forget about it! The options are limited, clunky, and costly. Plus, to truly gain any knowledge about the offering, you must contact a broker. You'll be lucky to get a returned call. The reason? Our data is differently shared. We aren't bound by boards of Realtors, like our residential brethren. Thus, you need a key to the walled garden -  a commercial broker - to see inside. 

Lesson two. The key to a sustainable source of transactions is your network. Chances are, your network is comprised of three sets of professionals – those upstream from your deals, downstream from your deals, and others unrelated to your business. Build your network with those whom you can trust and refer to them generously Team with your network in creative ways – introduce a contractor to a building owner, give a talk at a trade group, or author an article for an industry publication. In the process, you add tremendous value to your clients and help your network build their business. 

Lesson three. Champion content marketing. Approximately nine of ten searches for commercial properties begin on line. If you refer to Lesson one above, searchers become frustrated as they realize commercial queries aren't as fruitful as residential. Therefore, a digital presence is critical. Rich, helpful, and timely videos, blog posts, and “how to” articles, are the best way to build an on line presence. If folks can’t find you on the web, you're invisible!

Lesson four. As business people, we only have our time and our knowledge to share. If you are generous with both, your life is more meaningful. 

Lesson five. Find a way to focus on your strengths. Every business day contains tasks that expose a weakness – whether it's a lack of technological skill, an aversion to details, or a reluctance to prospect.  Chances are, someone is close by whose strengths are your weakness. A collaboration – blending differing skill sets to affect a positive result – is frequently the answer. 

Lesson six. Don't be afraid to go “old school” – such as: Drop by in person vs calling, avoid an email and mail a handwritten note, or attend a tour of your listing.